LabCorp furloughs employees as non-COVID-19 testing business craters

Thursday

Burlington-based LabCorp, which has become a critical source of testing during the COVID-19 pandemic, is furloughing employees as its non-coronavirus testing business fell by half in recent weeks.

The company, which employs around 9,000 people in North Carolina and has a large presence in Research Triangle Park, added that it will also freeze hiring, let go of temporary and contract workers, and suspend 401(k) contributions because of the impacts from the coronavirus.

The pandemic, the company said in a filing, has caused a 50% decline in its overall testing numbers compared to its normal levels.

LabCorp makes a majority of its money conducting routine tests, like drug testing employees for private companies or cholesterol tests for patients with cardiovascular disease. The company breaks down its business into two segments: Testing and drug development. The testing segment, which includes 5,000 offered tests, made up 60% of the company’s revenue in 2019.

Since March 5, it has also been offering COVID-19 tests, and the company said this week that it has performed approximately one million COVID-19 nasal swab tests since then. The company added that it now has capacity to perform about 1.8 million COVID-19 molecular tests per month.

LabCorp did not disclose how many employees will be furloughed — though a spokeswoman said the company was not planning "large-scale reductions."

Pattie Kushner, LabCorp’s chief communication officer, said in an email that the company’s ability to support COVID-19 testing remains unwavering despite the furloughs. The company did not make anyone available for an interview, and said it could not provide a timetable for how long the furloughs might last.

"Unfortunately, the health crisis is impacting our regular business in the form of clients postponing studies and programs, and lower demand for monitoring patient health and regular diagnostics work," Kushner said in the email.

"We are making decisions to reduce expenses during this health crisis and are taking prudent measures that preserve jobs while ensuring the long-term prospects of our business," she added. "... Our goal is to bring any impacted employees back to work to LabCorp as soon as possible. While we do not know when that will be, we intend for these measures to help us weather this crisis and preserve jobs for the long term."

The decline in its testing business led to a loss of $317 million in the first quarter, the company reported.

In the first quarter of 2019, for comparison, the company had net earnings of $185.6 million.

In its filing, the company said it hopes to offset some of the decline in testing by increasing the capacity of its new COVID-19 antibody tests to 200,000 tests per day by mid-May as well as its already in use molecular COVID-19 test.

Antibody tests, which test for the presence of coronavirus antibodies that develop after a person has been exposed to the virus, have been seen as a promising next step for determining how widespread COVID-19 infections are in the U.S. population. But most of these tests have not been reviewed by the Food and Drug Administration and there are questions about their accuracy.

LabCorp said earlier this month that it will make its antibody test available at thousands of doctors offices and at Walgreens locations in the coming months. Its antibody test has been available on a limited basis to health care workers since late March, LabCorp said; the company can currently perform over 50,000 antibody tests per day.

It hopes to boost that number to 200,000 tests by mid-May as more tests receive emergency use authorization (EUA) from the Food and Drug Administration. The FDA can make certain medical devices — in this case tests — available through emergency authorizations, when situations like COVID-19 justify their needs.

The U.S. has struggled to ramp up testing for COVID-19, and the FDA took action to "achieve more rapid and widespread testing capacity in the United States." However, even with an EUA, the tests are technically not yet approved or cleared by the FDA, and their authorization only lasts through the duration of the pandemic.

LabCorp is using an antibody test made by Abbott Laboratories, which has received an EUA from the FDA, Kushner said.

"LabCorp continues to evaluate other options to scale and expand serology (antibody) testing as needed," she added.

The company’s molecular test has received an EUA, and it has made a version of that test available as an at-home test kit. The company said its at-home collection kit is currently available for health care workers and first responders who have COVID-19 symptoms or meet testing criteria from the Centers for Disease Control and Prevention.

LabCorp has more than 100,000 at-home kits available, and it expects to increase their availability to more than 100,000 at-home kits per week, Kushner said.

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